The Planning Commission recommended denial in September, citing issues with privacy, setbacks and landscaping and finding the proposed development inconsistent with the neighborhood.

The site, on the Capitola-Live Oak property line, currently is operated by Thomas as Capitola Freight & Salvage. The front faces the back side of the Kings Plaza shopping center, and neighbors in the rear are homeowners on Bulb Avenue.

George Ow Jr., whose family has operated Kings Plaza shopping center for 48 years, foresees problems in putting a residential use building in close proximity to commercial uses. He predicted the senior housing residents would object to viewing the back side of the shopping center, citing its garbage enclosure, delivery hours and noise.

In a letter to the council, he noted problems that arose after the Best Western Capitola hotel was built 28 years after the neighboring commercial buildings, which houses O'Reilly Auto Parts, Save Mart and Rite Aid.

"After choosing to locate directly next to the garbage enclosures and loading docks of these businesses that have been operating for decades, the Best Western manager complained incessantly and tried to impose limitations on the times when the business could loan and unload their shipments of merchandise," Ow wrote.

Ow asked the city to require a sound wall, soundproof rooms and landscaping such as tall bamboo as mitigations.

Kim Frey, who lives on Bulb Avenue, wrote the council, saying a three-story building would "loom over our one-story single-family home like a spaceship."